Luxury Buyers Drifted North, But the Tide May Be Turning

Australia’s luxury housing map has been flipped on its head over the past five years, but the pendulum may finally be swinging back toward the big cities.

According to Ray White Group Senior Data Analyst Atom Go Tian, the pandemic years reshaped where prestige buyers put their money.

“If you were speaking about luxury houses five years ago, you wouldn’t even consider markets outside of Sydney and Melbourne,” he says.

But when COVID accelerated lifestyle migration and buyers were suddenly free to look elsewhere, the country’s wealthiest house hunters proved highly mobile.

“Luxury buyers proved themselves to be the most flexible and flocked away to where luxury was still sold at a discount,” Tian says. The result: Sydney and Melbourne were largely overlooked while regional prestige markets surged.

Both major cities saw their luxury prices spike briefly in 2021 as the COVID boom lifted the entire country, but the gains evaporated almost as quickly.

Rising interest rates and the lure of discounted luxury in the regions saw Sydney and Melbourne lose roughly half their 2021 uplift the following year.

The recovery since has been patchy. Tian says Sydney “grew six per cent between 2024 and 2025 after growing just two per cent between 2023 and 2024 to finally reach a new peak luxury price of $4.5 million”.

Melbourne, meanwhile, still hasn’t clawed back its pandemic peak. Luxury prices there rose five per cent between 2024 and 2025 after falling one per cent the year prior, ending 2025 at $2.6 million.

Over five years, the two major cities have been dwarfed by the east-coast lifestyle markets that stole their thunder. Sydney grew 35 per cent and Melbourne just 17 per cent.

Compare that with Brisbane (+77 per cent), Perth (+76 per cent), Adelaide (+73 per cent), the Gold Coast (+72 per cent), and the Sunshine Coast (+68 per cent).

That surge allowed the Sunshine Coast ($2.76 million) and Gold Coast ($2.86 million) to overtake Melbourne ($2.62 million) as the second and third most expensive luxury markets in the country.

Brisbane ($2.32 million) and Perth ($2.30 million) are now only 12 per cent cheaper than Melbourne, a huge shift from 2020 when both were 43 per cent cheaper.

Many assumed this decentralised luxury map was the new normal. But Tian says the last 12 months hint at a potential reversal.

“It’s easy to assume the new normal is a decentralised luxury market, but if the last 12 months signal what’s to come, luxury buyers may just be beginning to rediscover the value of Sydney’s prestige waterfront streets and Melbourne’s leafy inner suburbs.”

The price gaps that once tempted buyers north and west have narrowed. In 2020, Sydney was twice as expensive as the Gold Coast and Sunshine Coast.

Now the gap is closer to 1.5 times. Against Brisbane and Perth, the premium has shrunk from 2.5 times to 1.9. “Sydney’s premium looks more justified than overpriced,” Tian says.

Melbourne is a more complicated story. Its long lockdowns hit confidence harder than anywhere else, sending affluent buyers to other states. But Tian believes that weakness may now be its strength.

“At only 17 per cent growth over five years, it significantly underperformed relative to its fundamentals as Australia’s second-largest city.”

If interest rate cuts arrive and confidence lifts, he says the very buyers who abandoned Sydney and Melbourne could return to find relative value they haven’t seen in years.

Australia’s housing debate is often dominated by affordability and supply, but a new collaboration between Brickworks and acclaimed architecture firm Kennedy Nolan argues the conversation should also focus on the quality and longevity of the homes being built.

The project, titled Our Next Neighbourhood, examines how suburban housing could evolve in response to shrinking block sizes, rising energy costs, increasing density and changing family structures.

Rather than proposing luxury dream homes, the initiative focuses on what its creators describe as achievable suburban housing models that are more flexible, sustainable, and better suited to modern Australian life.

Brickworks commissioned Kennedy Nolan to investigate what suburban housing might look like if “design, long-term liveability and enduring materials were placed at the centre of the conversation”.

The result is two housing concepts, known as the Street Terrace and Canopy Terrace, which explore higher-density living while maintaining access to green space, natural light and privacy.

The designs incorporate adaptable floorplans that can evolve as family needs change, along with passive design principles intended to reduce reliance on mechanical heating and cooling.

Brett Ward, General Manager of Marketing at Brickworks, said the company wanted to broaden the discussion around housing beyond simply increasing supply.

“Much of the housing conversation today is understandably focused on supply and affordability, but there is an equally important discussion to be had about the quality and longevity of the homes we build,” he said.

“We wanted to explore how thoughtful design, combined with durable, resilient materials, could create homes that not only function well today, but continue to support Australian families and communities long into the future.”

Kennedy Nolan said the project was partly inspired by concerns that contemporary housing often struggles to adapt to changing household structures and environmental pressures.

The architects said innovation in suburban housing was “essential” to address changing family groupings, energy use, urban heat island effects and growing disconnection from place.

According to the design team, the concepts draw on lessons from some of Australia’s most influential housing projects while seeking to create neighbourhoods with stronger links to landscape, community and local identity.

Rachel Nolan, founder of Kennedy Nolan, said the practice saw an opportunity to reimagine suburban housing as something “more connected to our climate, our landscape, our communities and our Australian identity”.

The project comes as policymakers, developers and planners continue searching for ways to deliver more housing without sacrificing liveability, neighbourhood character or long-term sustainability.

Luxury Buyers Drifted North, But the Tide May Be Turning

New data shows Sydney and Melbourne underperformed during the lifestyle-migration boom, but shifting price gaps suggest prestige buyers may be circling back.

Brickworks has enlisted acclaimed architecture studio Kennedy Nolan to explore how homes could become more adaptable, energy-efficient and connected to community.